ROCKVILLE BANKEmployment Agreement for Mark A. KuciaAs Amended and Restated as of January 1, 2011     1. Employment  1 2. Term  1 3. Offices and Duties  2 (a) Generally  2 (b) Place of Employment  2 4. Salary and Annual Incentive Compensation  2 (a) Base Salary  3 (b) Annual Incentive Compensation  3 5. Long-Term Compensation, Including Stock Options, Benefits, DeferredCompensation, and Expense Reimbursement  3 (a) Executive Compensation Plans  3 (b) Employee and Executive Benefit Plans  3 (c) Acceleration of Awards Upon Termination Within Two YearsAfter a Change in Control  4 (d) Deferral of Compensation  4 (e) Company Registration Obligations  4 (f) Reimbursement of Expenses  5 (g) Limitations Under Code Section 409A  5 6. Termination Due to Retirement, Death, or Disability  5 (a) Retirement  5 (b) Death  6 (c) Disability  7 (d) Other Terms of Payment Following Retirement, Death, or Disability  9 7. Termination of Employment For Reasons Other Than Retirement, Death or Disability  10 (a) Termination by the Bank for Cause  10 
i 

 
     (b) Termination by Executive Other Than For Good Reason  10 (c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change inControl  11 (d) Termination by Executive for Good Reason Prior to or More than Two Years After a Change inControl  13 (e) Termination by the Bank Without Cause Within Two Years After a Change in Control  15 (f) Termination by Executive for Good Reason Within Two Years After a Change in Control  17 (g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section 409AExemptions; Delayed Payments Under Section 409A  19 8. Definitions Relating to Termination Events  22 (a) Cause  22 (b) Change in Control  23 (c) Compensation Accrued at Termination  24 (d) Disability  24 (e) Good Reason  24 (f) Potential Change in Control  26 (g) Specified Employee  26 9. Limitation on Change in Control Payments  26 10. Non-Competition and Non-Disclosure; Executive Cooperation;Non-Disparagement; Certain Forfeitures  27 (a) Non-Competition  27 (b) Non-Disclosure; Ownership of Work  27 (c) Cooperation With Regard to Litigation  28 (d) Non-Disparagement  28 (e) Release of Employment Claims  28 (f) Forfeiture of Outstanding Options  28 (g) Forfeiture of Certain Bonuses and Profits  29 (h) Forfeiture Due to Regulatory Restrictions  29 (i) Survival  29 11. Governing Law; Disputes  29 (a) Governing Law  29 (b) Reimbursement of Expenses in Enforcing Rights  30 (c) Dispute Resolution  30 
ii 

 
     (d) Interest on Unpaid Amounts  32 12. Miscellaneous  32 (a) Integration  32 (b) Successors; Transferability  32 (c) Beneficiaries  32 (d) Notices  33 (e) Reformation  33 (f) Headings  33 (g) No General Waivers  33 (h) No Obligation To Mitigate  33 (i) Offsets; Withholding  34 (j) Successors and Assigns  34 (k) Counterparts  34 13. Indemnification  34      Attachment A    
iii 

 
ROCKVILLE BANKEmployment Agreement for Mark A. KuciaAs Amended and Restated as of January 1, 2011     THIS EMPLOYMENT AGREEMENT (the “Agreement”) by and among ROCKVILLE FINANCIAL, INC., aConnecticut corporation (the “Company”), ROCKVILLE BANK, a Connecticut savings bank and awholly-owned subsidiary of the Company (the “Bank”), and Mark A. Kucia (“Executive”) which wasfirst effective as of January 1, 2010 (the “Effective Date”), is hereby amended and restated in itsentirety as of January 1, 2011.WITNESSETH     WHEREAS, Executive is currently employed as Senior Vice President of the Bank; and     WHEREAS, the Company and the Bank desire to ensure that the Company and the Bank are assuredof the continued availability of Executive’s services as provided in this Agreement; and     WHEREAS, Executive is willing to continue to serve the Company and the Bank on the terms andconditions hereinafter set forth; and     WHEREAS, the Company, the Bank and Executive desire to amend and restate the Agreement in itsentirety effective as of January 1, 2011.     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, andother good and valuable consideration the receipt and adequacy of which the Company, the Bank andExecutive each hereby acknowledge, the Company, the Bank and Executive hereby agree as follows:1. **Employment.**     The Bank hereby agrees to employ Executive as its Senior Vice President (with the principalexecutive duties set forth below in Section 3), and Executive hereby agrees to accept suchemployment and serve in such capacities, during the Term as defined in Section 2 (subject toSection 7(c) and 7(e)) and upon the terms and conditions set forth in this Agreement.2. **Term.**     The term of employment of Executive under this Agreement (the “Term”) shall be the periodcommencing on January 1, 2011 and ending on December 31, 2011 and any period of extension thereofin accordance with this Section 2, except that the Term will end at a date, prior to the end ofsuch period or extension thereof, specified in Section 6 or 7 in the event of termination ofExecutive’s employment. The Term, if not previously ended, shall be extended by
 

 
one additional year(added to the end of the Term) first on December 31, 2011 (extending theTerm to December 31, 2012) and on each succeeding December 31st thereafter (a“December 31st extension date”) but only in the event the Bank serves written notice inaccordance with Section 12(d) upon Executive at least 60 days preceding December 31, 2011 extendingthe Term to December 31, 2012 and thereafter at least 60 days preceding a December 31stextension date, in which case the Term shall be extended to the next succeeding December31st, subject to earlier termination of Executive’s employment and earlier terminationof the Term in accordance with Section 6 or 7. The foregoing notwithstanding, in the event thereoccurs a Potential Change in Control during the Term, the Term shall be extended automaticallyuntil the day after the earlier of: (a) the second anniversary of the date the Change in Controlis consummated; or (b) the date the Change in Control contemplated by the Potential Change inControl is fully and finally abandoned.3. **Offices and Duties.**     The provisions of this Section 3 will apply during the Term, except as otherwise provided inSection 7(c) or 7(e):     (a) Generally. Executive shall serve as the Senior Vice President of the Bank.Executive shall have and perform such duties, responsibilities, and authorities as are prescribedby or under the Bylaws of the Bank and as are customarily associated with such position or,irrespective of the office, title or other designation, if any, a position with responsibilitiesand powers substantially identical to such position with the Bank. In addition, Executive shallhave and perform such additional duties, responsibilities, and authorities as may be from time totime assigned by the President and Chief Executive Officer based on his assessment of the businessneeds of the Bank, and the Bank reserves the right to change or modify these assignments and anypositions and titles associated therewith. Executive shall devote his full business time andattention, and his best efforts, abilities, experience, and talent, to the position of Senior VicePresident and other assignments hereunder, and for the business of the Bank, without commitment toother business endeavors, except that Executive (i) may make personal investments which are not inconflict with his duties to the Bank and manage personal and family financial and legal affairs,(ii) may undertake public speaking engagements, and (iii) may serve as a director of (or similarposition with) any other business or an educational, charitable, community, civic, religious, orsimilar type of organization with the approval of the President and Chief Executive Officer, solong as such activities (i.e., those listed in clauses (i) through (iii)) do not preclude or renderunlawful Executive’s employment or service to the Bank or otherwise materially inhibit theperformance of Executive’s duties under this Agreement or materially impair the business of theBank or its affiliates.     (b) Place of Employment. Executive’s principal place of employment shall be at theadministrative offices of the Bank.4. **Salary and Annual Incentive Compensation.**     As partial compensation for the services to be rendered hereunder by Executive, the Bankagrees to pay to Executive during the Term the compensation set forth in this Section 4.
2

 
     (a) Base Salary. The Bank will pay to Executive during the Term a base salary, theannual rate of which shall be $180,000.08, payable in cash in substantially equal semi-monthlyinstallments commencing at the beginning of the Term, and otherwise in accordance with the Bank’susual payroll practices with respect to senior executives (except to the extent deferred underSection 5(d)). Executive’s annual base salary shall be reviewed by the Human Resources Committee(the “Committee”) of the Board of Directors of the Bank (the “Board”) at least once in eachcalendar year, and may be increased above, but may not be reduced below, the then-current rate ofsuch base salary. For purposes of this Agreement, “Base Salary” means Executive’s then-currentbase salary.     (b) Annual Incentive Compensation. The Bank will pay to Executive during the Termannual incentive compensation which shall offer to Executive an opportunity to earn additionalcompensation based upon performance in amounts determined by the Committee in accordance with theapplicable plan and consistent with past practices of the Bank, with the nature of the performanceand the levels of performance triggering payments of such annual target incentive compensation foreach year to be established and communicated to Executive during the first quarter of such year bythe Committee. In addition, the Committee (or the Board) may determine, in its discretion, toincrease Executive’s annual target incentive opportunity or provide an additional annual incentiveopportunity, in excess of the annual target incentive opportunity, payable for performance inexcess of or in addition to the performance required for payment of the annual target incentiveamount. Any annual incentive compensation payable to Executive shall be paid in accordance withthe applicable plan (except to the extent deferred under Section 5(d)).5. **Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and ExpenseReimbursement.**     (a) Executive Compensation Plans. Executive shall be entitled during the Term toparticipate, without discrimination or duplication, in executive compensation plans and programsintended for general participation by senior executives of the Bank, as presently in effect or asthey may be modified or added to by the Bank from time to time, subject to the eligibility andother requirements of such plans and programs, including without limitation any stock option plans,plans under which restricted stock/restricted stock units, performance-based restrictedstock/restricted stock units or performance-accelerated restricted stock/restricted stock units(collectively, “stock plans”) may be awarded, other annual and long-term cash and/or equityincentive plans, and deferred compensation plans. The Bank makes no commitment under this Section5(a) to provide participation opportunities to Executive in all plans and programs or at levelsequal to (or otherwise comparable to) the participation opportunity of any other executive.     (b) Employee and Executive Benefit Plans. Executive shall be entitled during the Termto participate, without discrimination or duplication, in employee and executive benefit plans andprograms of the Bank, as presently in effect or as they may be modified or added to by the Bankfrom time to time, subject to the eligibility and other requirements of such plans and programs,including without limitation plans providing pensions, supplemental pensions, supplemental andother retirementbenefits, medical insurance, life insurance, disability insurance, and accidental death ordismemberment insurance, as well as savings, profit-sharing, and stock ownership plans. The Bankmakes no commitment under this Section 5(b) to provide
3

 
participation opportunities to Executive inall benefit plans and programs or at levels equal to (or otherwise comparable to) the participationopportunity of any other executive.     In furtherance of and not in limitation of the foregoing, during the Term: (i) Executive will participate as Senior Vice President in allexecutive and employee vacation and time-off programs;  (ii) The Bank will provide Executive with coverage as Senior VicePresident with respect to long-term disability insurance;  (iii) Executive will be covered by Bank-paid group term lifeinsurance; and  (iv) Executive will be entitled to benefits under the SupplementalSavings and Retirement Plan (the “SERP”) in accordance with the terms thereof,with the effective date of Executive’s participation therein to be theEffective Date.     (c) Acceleration of Awards Upon Termination Within Two Years After a Change inControl. In the event of termination of the employment of Executive, other than for Cause,simultaneously with or within two years after a Change in Control (as defined in Section 8(b)), alloutstanding stock options, restricted stock, and other equity-based awards then held by Executiveshall become vested and exercisable. The time and form of payment of such equity-based awardsshall be governed by the plans and programs and the agreements and other documents pursuant towhich such equity-based awards were granted.     (d) Deferral of Compensation. If the Bank has in effect or adopts any deferralprogram or arrangement permitting executives to elect to defer any compensation, Executive will beeligible to participate in such program. Any plan or program of the Bank which provides benefitsbased on the level of salary, annual incentive, or other compensation of Executive shall, indetermining Executive’s benefits, take into account the amount of salary, annual incentive, orother compensation prior to any reduction for voluntary contributions made by Executive under anydeferral or similar contributory plan or program of the Bank (excluding compensation that would notbe taken into account even if not deferred), but shall not treat any payout or settlement undersuch a deferral or similar contributory plan or program to be additional salary, annual incentive,or other compensation for purposes of determining such benefits, unless otherwise expresslyprovided under such plan or program.     (e) Company Registration Obligations. The Company will use its best efforts to filewith the Securities and Exchange Commission and thereafter maintain the effectiveness of one ormore registration statements registering under the Securities Act of 1933, as amended (the “1933Act”), the offer and sale of shares by the Company to Executive pursuant to stock options or otherequity-based awardsgranted to Executive under Company plans or otherwise or, if shares are acquired by Executivein a transaction not involving an offer or sale to Executive but resulting in the acquired sharesbeing “restricted securities” for purposes of the 1933 Act, registering the reoffer and resale ofsuch shares by Executive.
4

 
     (f) Reimbursement of Expenses. The Bank will promptly reimburse Executive for allreasonable business expenses and disbursements incurred by Executive in the performance ofExecutive’s duties during the Term in accordance with the Bank’s reimbursement policies as ineffect from time to time and the provisions of Section 7(g) of this Agreement.     (g) Limitations Under Code Section 409A. Anything in this Section 5 to the contrarynotwithstanding, with respect to any payment otherwise required hereunder, in the event of anydelay in the payment date as a result of Section 7(g) of this Agreement (relating to the six-monthdelay in payment of certain benefits to Specified Employees as required by Section 409A of theCode), the Bank will adjust the payment to reflect the deferred payment date by multiplying thepayment by the product of the six-month CMT Treasury Bill annualized yield rate as published by theU.S. Treasury for the date on which such payment would have been made but for the delay multipliedby a fraction, the numerator of which is the number of days by which such payment was delayed andthe denominator of which is 365. The Bank will pay the adjusted payment at the beginning of theseventh month following Executive’s termination of employment. Notwithstanding the foregoing, ifcalculation of the amounts payable by such payment date is not administratively practicable due toevents beyond the control of Executive (or Executive’s beneficiary or estate) and for reasons thatare commercially reasonable, payment will be made as soon as administratively practicable incompliance with Section 409A of the Code and the Regulations. In the event of Executive’s deathduring such six-month period, payment will be made in the payroll period next following the payrollperiod in which Executive’s death occurs.6. **Termination Due to Retirement, Death, or Disability.**     (a) Retirement. Executive may elect to terminate employment hereunder by retirementat or after age 60 (“Retirement”). At the time Executive’s employment terminates due toRetirement, the Term will terminate, all obligations of the Bank and Executive under Sections 1through 5 of this Agreement will immediately cease except for obligations which expressly continueafter termination of employment due to Retirement, and the Bank will pay Executive at the timespecified in Section 6(d), and Executive will be entitled to receive, the following: (i) Executive’s Compensation Accrued at Termination (as defined inSection 8(c));  (ii) In lieu of any annual incentive compensation under Section 4(b)for the year in which Executive’s employment terminated, a lump sum amountequal to the portion of annual incentive compensation that would have becomepayable in cash to Executive (i.e., excluding the portion payable instock or in other non-cash awards) for that year if his employment had notterminated, based on performance actually achieved in that year (determinedby the Committee following completion of the performance year and paid atthe time specified in the applicable plan), multiplied by a fraction thenumerator of which is the number of days Executive was employed in the yearof termination and the denominator of which is the total number of days inthe year of termination;
5

 
 (iii) The vesting and exercisability of stock options held byExecutive at termination and all other terms of such options shall be governedby the plans and programs and the agreements and other documents pursuant towhich such options were granted (subject to Section 10(f) hereof);  (iv) All restricted stock and deferred stock awards, includingoutstanding stock plan awards, all other long-term incentive awards, and alldeferral arrangements under Section 5(d), shall be governed by the plans andprograms under which the awards were granted or governing the deferral, and allrights under the SERP and any other benefit plan shall be governed by suchplans; and  (v) Upon Retirement, if Executive is not eligible for retireecoverage under the Bank’s health plan (the “Health Plan”) or Medicare andprovided that Executive shall be in compliance with the conditions set forth inSection 10, the Bank shall pay to Executive a lump sum amount equal on anafter-tax basis to the present value of the total cost of medical coverageunder the Health Plan that would have been incurred by both Executive and theBank on behalf of Executive (and his spouse and eligible dependents, if any,for whom coverage had been provided under the Health Plan immediately prior toExecutive’s Retirement) from the date of Executive’s Retirement untilExecutive’s attainment of Social Security retirement age had Executive remainedemployed by the Bank during such period, calculated on the assumption that thecost of such coverage would remain unchanged from that in effect for the yearof Executive’s Retirement. Such lump sum amount shall be calculated by anactuary selected by the Bank and paid in cash at the time specified in Section6(d). Such amount shall not be subject to reduction or forfeiture by reason ofany coverage for which Executive may thereafter become eligible by reason ofsubsequent employment or otherwise. For purposes of this Section, present valueshall be calculated on the basis of the discount rate set forth in the Bank’squalified retirement plan for the determination of lump sum payments.     (b) Death. In the event of Executive’s death which results in the termination ofExecutive’s employment, the Term will terminate, all obligations of the Bank and Executive underSections 1 through 5 of this Agreement will immediately cease except for obligations whichexpressly continue after death, and the Bank will pay Executive’s beneficiary or estate at the timespecified in Section 6(d), and Executive’s beneficiary or estate will be entitled to receive, thefollowing: (i) Executive’s Compensation Accrued at Termination;  (ii) In lieu of any annual incentive compensation under Section 4(b)for the year in which Executive’s death occurred, a lump sum amount equal tothe portion of annual incentive compensation that would have become payable incash to Executive (i.e., excluding the portion payable in stock or in othernon-cash awards) for that year if his employment had not 
6

 
   terminated, based onperformance actually achieved in that year (determined by the Committeefollowing completion of the performance year and paid at the time specified inthe applicable plan), multiplied by a fraction the numerator of which is thenumber of days Executive was employed in the year of his death and thedenominator of which is the total number of days in the year of death; (iii) The vesting and exercisability of stock options held byExecutive at death and all other terms of such options shall be governed by theplans and programs and the agreements and other documents pursuant to whichsuch options were granted;  (iv) All restricted stock and deferred stock awards, includingoutstanding stock plan awards, all other long-term incentive awards, and alldeferral arrangements under Section 5(d), shall be governed by the plans andprograms under which the awards were granted or governing the deferral, and allrights under the SERP and any other benefit plan shall be governed by suchplans;  (v) If Executive’s surviving spouse (and eligible dependents, ifany) elects continued coverage under the Bank’s Health Plan in accordance withthe applicable provisions of COBRA, the Bank shall pay to Executive’s survivingspouse on a monthly basis during such COBRA continuation period and inaccordance with Section 7(g) of this Agreement an amount equal on an after-taxbasis to the total cost of such coverage. No further benefits shall be paidunder this Section after the expiration of the maximum COBRA continuationperiod available to Executive’s surviving spouse and eligible dependents, ifany.     (c) Disability. The Bank may terminate the employment of Executive hereunder due tothe Disability (as defined in Section 8(d)) of Executive. Upon termination of employment, the Termwill terminate, all obligations of the Bank and Executive under Sections 1 through 5 of thisAgreement will immediately cease except for obligations which expressly continue after terminationof employment due to Disability, and the Bank will pay Executive at the time specified in Section6(d), and Executive will be entitled to receive, the following: (i) Executive’s Compensation Accrued at Termination;  (ii) In lieu of any annual incentive compensation under Section 4(b)for the year in which Executive’s employment terminated, a lump sum amountequal to the portion of annual incentive compensation that would have becomepayable in cash to Executive (i.e., excluding the portion payable in stock orin other non-cash awards) for that year if his employment had not terminated,based on performance actually achieved in that year (determined by theCommittee following completion of the performance year and paid at the timespecified in the applicable plan), multiplied by a fraction the numerator ofwhich is the number of days Executive was 
7

 
   employed in the year of terminationand the denominator of which is the total number of days in the year oftermination; (iii) Stock options held by Executive at termination shall begoverned by the plans and programs and the agreements and other documentspursuant to which such options were granted;  (iv) Any performance objectives upon which the earning ofperformance-based restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards isconditioned shall be deemed to have been met at target level at the date oftermination, and restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards (to theextent then or previously earned, in the case of performance-based awards)shall become fully vested and non-forfeitable at the date of such termination,and, in other respects, such awards shall be governed by the plans and programsand the agreements and other documents pursuant to which such awards weregranted;  (v) Disability benefits shall be payable in accordance with theBank’s plans, programs and policies, including the SERP, and all deferralarrangements under Section 5(d) will be settled in accordance with the plansand programs governing the deferral;  (vi) Upon termination of Executive’s employment due to Disability,if Executive is not eligible for retiree coverage under the Bank’s Health Planor Medicare and provided that Executive shall be in compliance with theconditions set forth in Section 10, the Bank shall pay to Executive a lump sumamount equal on an after-tax basis to the present value of the total cost ofmedical coverage under the Health Plan that would have been incurred by bothExecutive and the Bank on behalf of Executive (and his spouse and eligibledependents, if any, for whom coverage had been provided under the Health Planimmediately prior to Executive’s termination of employment) from the date ofExecutive’s termination of employment until Executive’s attainment of SocialSecurity retirement age had Executive remained employed by the Bank during suchperiod, calculated on the assumption that the cost of such coverage wouldremain unchanged from that in effect for the year of Executive’s termination ofemployment. Such lump sum amount shall be calculated by an actuary selectedby the Bank and paid in cash at the time specified in Section 6(d). Suchamount shall not be subject to reduction or forfeiture by reason of anycoverage for which Executive may thereafter become eligible by reason ofsubsequent employment or otherwise. In addition, provided that Executiveshall be in compliance with the conditions set forth in Section 10, the Bankshall pay to Executive at the time specified in Section 6(d) a lump sumamount equal on an after-tax basis to the present value of the sum of (A)the amount that Executive and the Bank would have paid, had 
8

 
   he remainedemployed, for coverage under the Bank’s group long-term disability policyfrom the date of Executive’s termination of employment until Executive’sattainment of Social Security retirement age, calculated on the assumptionthat the cost of such coverage would remain unchanged from that in effectfor the year in which Executive’s termination occurred; and (B) the amountthat Executive and the Bank would have paid to continue Executive’s grouplife insurance coverage, had he remained employed, from the date ofExecutive’s termination of employment until Executive’s attainment of SocialSecurity retirement age, calculated on the assumption that the cost of suchcoverage would remain unchanged from that in effect for the year in whichExecutive’s termination occurred. For purposes of this Section, presentvalue shall be calculated on the basis of the discount rate set forth in theBank’s qualified retirement plan for the determination of lump sum payments.     (d) Other Terms of Payment Following Retirement, Death, or Disability. Nothing inthis Section 6 shall limit the benefits payable or provided in the event Executive’s employmentterminates due to Retirement, death, or Disability under the terms of plans or programs of the Bankmore favorable to Executive (or his beneficiaries) than the benefits payable or provided under thisSection 6 (except in the case of annual incentives in lieu of which amounts are paid hereunder),including plans and programs adopted after the date of this Agreement. Amounts payable under thisSection 6 following Executive’s termination of employment, other than those expressly payablefollowing determination of performance for the year of termination for purposes of annual incentivecompensation or otherwise expressly payable on a deferred basis, will be paid in the payroll periodnext following the payroll period in which termination of employment occurs; subject, however, tothe provisions of Section 7(g) of this Agreement relating to the six-month delay in payment ofcertain benefits to Specified Employees as required by Section 409A of the Code. Any payment orreimbursement due within such six-month period shall be delayed to the end of such six-month periodas required by Section 7(g). The Bank will adjust the payment or reimbursement to reflect thedeferred payment date by multiplying the payment by the product of the six-month CMT Treasury Billannualized yield rate as published by the U.S. Treasury for the date on which such payment orreimbursement would have been made but for the delay multiplied by a fraction, the numerator ofwhich is the number of days by which such payment or reimbursement was delayed and the denominatorof which is 365. In the event of a reimbursement that is required by other terms of this Agreementto be made on an after-tax basis which is subject to the six-month delay in payment as described inSection 7(g) of thisAgreement, the reimbursement as adjusted in accordance with this Section 6(d) to reflect thedeferred payment date shall be paid to Executive on an after-tax and fully grossed-up basis so thatExecutive is held economically harmless. The Bank will pay the adjusted payment or reimbursement atthe beginning of the seventh month following Executive’s termination of employment.Notwithstanding the foregoing, if calculation of the amounts payable by such payment date is notadministratively practicable due to events beyond the control of Executive (or Executive’sbeneficiary or estate) and for reasons that are commercially reasonable, payment will be made assoon as administratively practicable in compliance with Section 409A of the Code and theRegulations. In the event of Executive’s death during such six-month period, payment will be madein the payroll period next following the payroll period in which Executive’s death occurs.
9

 
7. **Termination of Employment For Reasons Other Than Retirement, Death or Disability**.     (a) Termination by the Bank for Cause. The Bank may terminate the employment ofExecutive hereunder for Cause (as defined in Section 8(a)) at any time. At the time Executive’semployment is terminated for Cause, the Term will terminate, all obligations of the Bank andExecutive under Sections 1 through 5 of this Agreement will immediately cease except forobligations which expressly continue after termination of employment by the Bank for Cause, and theBank will pay Executive at the time specified in Section 7(g), and Executive will be entitled toreceive, the following: (i) Executive’s Compensation Accrued at Termination (as defined inSection 8(c));  (ii) All stock options, restricted stock and deferred stock awards,including outstanding stock plan awards, and all other long-term incentiveawards will be governed by the terms of the plans and programs under which theawards were granted; and  (iii) All deferral arrangements under Section 5(d) will be settledin accordance with the plans and programs governing the deferral, and allrights, if any, under the SERP and any other benefit plan shall be governed bysuch plans.     (b) Termination by Executive Other Than For Good Reason. Executive may terminate hisemployment hereunder voluntarily for reasons other than Good Reason (as defined in Section 8(e)) atany time upon 90 days’ written notice to the Bank. An election by Executive not to extend the Termpursuant to Section 2 hereof shall be deemed to be a termination of employment by Executive forreasons other than Good Reason at the date of expiration of the Term, unless a Change in Control(as defined in Section 8(b)) occurs prior to, and there exists Good Reason at, such date ofexpiration; provided, however, that, if Executive has attained age 60 at such date of termination,such termination shall be deemed a Retirement of Executive, which shall instead be governed bySection 6(a) above. At the time Executive’s employment is terminated by Executive other than forGood Reason the Term will terminate, all obligations of the Bank and Executive underSections 1 through 5 of this Agreement will immediately cease, and the Bank will pay Executiveat the time specified in Section 7(g), and Executive will be entitled to receive, the following: (i) Executive’s Compensation Accrued at Termination;  (ii) All stock options, restricted stock and deferred stock awards,including outstanding stock plan awards, and all other long-term incentiveawards will be governed by the terms of the plans and programs under which theawards were granted;  (iii) All deferral arrangements under Section 5(d) will be settledin accordance with the plans and programs governing the deferral, and allrights under the SERP and any other benefit plan shall be governed by suchplans.
10

 
     (c) Termination by the Bank Without Cause Prior to or More than Two Years After a Changein Control. The Bank may terminate the employment of Executive hereunder without Cause, if atthe date of termination no Change in Control has occurred or such date of termination is at leasttwo years after the most recent Change in Control, upon at least 90 days’ written notice toExecutive. The foregoing notwithstanding, the Bank may elect, by written notice to Executive, toterminate Executive’s positions specified in Sections 1 and 3 and all other obligations ofExecutive and the Bank under Section 3 at a date earlier than the expiration of such 90-day period,if so specified by the Bank in the written notice, provided that Executive shall be treated as anemployee of the Bank (without any assigned duties) for all other purposes of this Agreement,including for purposes of Sections 4 and 5, from such specified date until the expiration of such90-day period. At the time Executive’s employment is terminated by the Bank (i.e., at theexpiration of such notice period), the Term will terminate, all remaining obligations of the Bankand Executive under Sections 1 through 5 of this Agreement will immediately cease (except forobligations which continue after termination of employment as expressly provided herein), and theBank will pay Executive at the time specified in Section 7(g), and Executive will be entitled toreceive, the following: (i) Executive’s Compensation Accrued at Termination;  (ii) Cash in an aggregate amount equal to one and one-half (1.5)times the sum of (A) Executive’s Base Salary under Section 4(a) immediatelyprior to termination plus (B) an amount equal to the greater of (x) the portionof Executive’s annual target incentive compensation potentially payable in cashto Executive (i.e., excluding the portion payable in stock or in other non-cashawards) for the year of termination or (y) the portion of Executive’s annualincentive compensation that became payable in cash to Executive (i.e.,excluding the portion payable in stock or in other non-cash awards) for thelatest year preceding the year of termination based on performance actuallyachieved in that latest year. The amount determined to be payable under thisSection 7(c)(ii) shall be payable a lump sum;  (iii) In lieu of any annual incentive compensation under Section4(b) for the year in which Executive’s employment terminated, a lump sum amountequal to the portion of Executive’s annual target incentive compensationpotentially payable in cash to Executive (i.e., excluding the portion payablein stock or in other non-cash awards) for the year of termination, multipliedby a fraction the numerator of which is the number of days Executive wasemployed in the year of termination and the denominator of which is the totalnumber of days in the year of termination;  (iv) Stock options held by Executive at termination, if not thenvested and exercisable, will become fully vested and exercisable at the date ofsuch termination, and, in other respects (including the period followingtermination during which such options may be exercised), such options shall begoverned by the plans and programs and the agreements and other documentspursuant to which such options were granted;
11

 
 (v) Any performance objectives upon which the earning ofperformance-based restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards isconditioned shall be deemed to have been met at target level at the date oftermination, and restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards (to theextent then or previously earned, in the case of performance-based awards)shall become fully vested and non-forfeitable at the date of such termination,and, in other respects, such awards shall be governed by the plans and programsand the agreements and other documents pursuant to which such awards weregranted;  (vi) All deferral arrangements under Section 5(d) will be settled inaccordance with the plans and programs governing the deferral;  (vii) All rights under the SERP shall be governed by such plan;  (viii) Upon termination of Executive’s employment hereunder, if Executive is noteligible for retiree coverage under the Bank’s Health Plan or Medicare andprovided that Executive shall be in compliance with the conditions set forth inSection 10, the Bank shall pay to Executive a lump sum amount equal on anafter-tax basis to the present value of the total cost of medical coverageunder the Health Plan that would have been incurred by both Executive and theBank on behalf of Executive (and his spouse and eligible dependents, if any,for whom coverage had been provided under the Health Plan immediately prior to Executive’s terminationof employment) from the date of Executive’s termination of employment until the third anniversary of such date, calculated on the assumption that the costof such coverage would remain unchanged from that in effect for the year of Executive’s termination of employment. Such lump sum amount shall becalculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction orforfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition,provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) alump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remainedemployed, for coverage under the Bank’s group long-term disability policy from the date of Executive’s termination of employment until the third anniversaryof Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for theyear in which Executive’s termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executive’s group life insurancecoverage, had he remained employed, from the date of Executive’s termination of employment until
12

 
   the third anniversary of Executive’s termination of employment,calculated on the assumption that the cost of such coverage would remainunchanged from that in effect for the year in which Executive’s terminationoccurred. For purposes of this Section, present value shall be calculatedon the basis of the discount rate set forth in the Bank’s qualifiedretirement plan for the determination of lump sum payments.     (d) Termination by Executive for Good Reason Prior to or More than Two Years After aChange in Control. Executive may terminate his employment hereunder for Good Reason, prior toa Change in Control or after the second anniversary of the most recent Change in Control, upon 90days’ written notice to the Bank; provided, however, that, if the Bank has corrected the basis forsuch Good Reason within 30 days after receipt of such notice, Executive may not terminate hisemployment for Good Reason, and therefore Executive’s notice of termination will automaticallybecome null and void. At the time Executive’s employment is terminated by Executive for GoodReason (i.e., at the expiration of such notice period), the Term will terminate, all obligations ofthe Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease (exceptfor obligations which continue after termination of employment as expressly provided herein), andthe Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitledto receive, the following: (i) Executive’s Compensation Accrued at Termination;  (ii) Cash in an aggregate amount equal to one and one-half (1.5)times the sum of (A) Executive’s Base Salary under Section 4(a) immediatelyprior to termination plus (B) an amount equal to the greater of (x) the portionof Executive’s annual target incentive compensation potentially payable in cashto Executive (i.e., excluding the portion payable in stock or in other non-cashawards) for the year of termination or (y) the portion of Executive’s annualincentive compensation that became payable in cash to Executive (i.e.,excluding the portion payable in stock or in other non-cash awards) for thelatest year preceding the year of termination based on performance actuallyachieved in that latest year. The amount determined to be payable under thisSection 7(d)(ii) shall be payable in a lump sum;  (iii) In lieu of any annual incentive compensation under Section4(b) for the year in which Executive’s employment terminated, a lump sum amountequal to the portion of Executive’s annual target incentive compensationpotentially payable in cash to Executive (i.e., excluding the portion payablein stock or in other non-cash awards) for the year of termination, multipliedby a fraction the numerator of which is the number of days Executive wasemployed in the year of termination and the denominator of which is the totalnumber of days in the year of termination;  (iv) Stock options held by Executive at termination, if not thenvested and exercisable, will become fully vested and exercisable at the date ofsuchtermination, and, in other respects (including the period followingtermination during which such options may be exercised), such options 
13

 
   shallbe governed by the plans and programs and the agreements and other documentspursuant to which such options were granted; (v) Any performance objectives upon which the earning ofperformance-based restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards isconditioned shall be deemed to have been met at target level at the date oftermination, and restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards (to theextent then or previously earned, in the case of performance-based awards)shall become fully vested and non-forfeitable at the date of such termination,and, in other respects, such awards shall be governed by the plans and programsand the agreements and other documents pursuant to which such awards weregranted;  (vi) All deferral arrangements under Section 5(d) will be settled inaccordance with the plans and programs governing the deferral;  (vii) All rights under the SERP shall be governed by such plan; and  (viii) Upon termination of Executive’s employment hereunder, if Executive is noteligible for retiree coverage under the Bank’s Health Plan or Medicare andprovided that Executive shall be in compliance with the conditions set forth inSection 10, the Bank shall pay to Executive a lump sum amount equal on anafter-tax basis to the present value of the total cost of medical coverageunder the Health Plan that would have been incurred by both Executive and theBank on behalf of Executive (and his spouse and eligible dependents, if any,for whom coverage had been provided under the Health Plan immediately prior toExecutive’s termination of employment) from the date of Executive’s terminationof employment until the third anniversary of such date, calculated on theassumption that the cost of such coverage would remain unchanged from that ineffect for the year of Executive’s termination of employment. Such lump sumamount shall be calculated by an actuary selected by the Bank and paid in cashat the time specified in Section 7(g). Such amount shall not be subject toreduction or forfeiture by reason of any coverage for which Executive maythereafter become eligible by reason of subsequent employment or otherwise. Inaddition, provided that Executive shall be in compliance with the conditionsset forth in Section 10, the Bank shall pay to Executive at the time specifiedin Section 7(g) a lump sum amount equal on an after-tax basis to the presentvalue of the sum of (A) the amount that Executive and the Bank would have paid,had he remained employed, for coverage under the Bank’s group long-termdisability policy from the date of Executive’s termination of employment untilthe third anniversary of Executive’s termination of employment, calculated onthe assumption that the cost of such coveragewould remain unchanged from that in effect for the year in which Executive’stermination occurred; 
14

 
   and (B) the amount that Executive and the Bank wouldhave paid to continue Executive’s group life insurance coverage, had heremained employed, from the date of Executive’s termination of employmentuntil the third anniversary of Executive’s termination of employment,calculated on the assumption that the cost of such coverage would remainunchanged from that in effect for the year in which Executive’s terminationoccurred. For purposes of this Section, present value shall be calculatedon the basis of the discount rate set forth in the Bank’s qualifiedretirement plan for the determination of lump sum payments.If any payment or benefit under this Section 7(d) is based on Base Salary or other level ofcompensation or benefits at the time of Executive’s termination and if a reduction in such BaseSalary or other level of compensation or benefit was the basis for Executive’s termination for GoodReason, then the Base Salary or other level of compensation in effect before such reduction shallbe used to calculate payments or benefits under this Section 7(d).     (e) Termination by the Bank Without Cause Within Two Years After a Change in Control.The Bank may terminate the employment of Executive hereunder without Cause, simultaneously with orwithin two years after a Change in Control, upon at least 90 days’ written notice to Executive.The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to terminateExecutive’s positions specified in Sections 1 and 3 and all other obligations of Executive and theBank under Section 3 at a date earlier than the expiration of such 90-day notice period, if sospecified by the Bank in the written notice, provided that Executive shall be treated as anemployee of the Bank (without any assigned duties) for all other purposes of this Agreement,including for purposes of Sections 4 and 5, from such specified date until the expiration of such90-day period. At the time Executive’s employment is terminated by the Bank (i.e., at theexpiration of such notice period), the Term will terminate, all remaining obligations of the Bankand Executive under Sections 1 through 5 of this Agreement will immediately cease (except forobligations which continue after termination of employment as expressly provided herein), and theBank will pay Executive at the time specified in Section 7(g), and Executive will be entitled toreceive, the following: (i) Executive’s Compensation Accrued at Termination;  (ii) Cash in an aggregate amount equal to three times the sum of (A)Executive’s Base Salary under Section 4(a) immediately prior to terminationplus (B) an amount equal to the greater of (x) the portion of Executive’sannual target incentive compensation potentially payable in cash to Executive(i.e., excluding the portion payable in stock or in other non-cash awards) forthe year of termination or (y) the portion of Executive’s annual incentivecompensation that became payable in cash to Executive (i.e., excluding theportion payable in stock or in other non-cash awards) for the latest yearpreceding the year of termination based on performance actually achieved inthat latest year. The amount determinedto be payable under this Section 7(e)(ii) shall be paid by the Bank in alump sum;
15

 
 (iii) In lieu of any annual incentive compensation under Section4(b) for the year in which Executive’s employment terminated, a lump sum amountequal to the portion of Executive’s annual target incentive compensationpotentially payable in cash to Executive (i.e., excluding the portion payablein stock or in other non-cash awards) for the year of termination, multipliedby a fraction the numerator of which is the number of days Executive wasemployed in the year of termination and the denominator of which is the totalnumber of days in the year of termination;  (iv) Stock options held by Executive at termination, if not thenvested and exercisable, will become fully vested and exercisable at the date ofsuch termination, and any such options granted on or after the Effective Dateshall remain outstanding and exercisable until the stated expiration date ofthe Option as though Executive’s employment did not terminate, and, in otherrespects, such options shall be governed by the plans and programs and theagreements and other documents pursuant to which such options were granted;  (v) Any performance objectives upon which the earning ofperformance-based restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards isconditioned shall be deemed to have been met at target level at the date oftermination, and restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards (to theextent then or previously earned, in the case of performance-based awards)shall become fully vested and non-forfeitable at the date of such termination,and, in other respects, such awards shall be governed by the plans and programsand the agreements and other documents pursuant to which such awards weregranted;  (vi) All deferral arrangements under Section 5(d) will be settled inaccordance with the plans and programs governing the deferral;  (vii) All rights under the SERP shall be governed by such plan; and  (viii) Upon termination of Executive’s employment hereunder, if Executive is noteligible for retiree coverage under the Bank’s Health Plan or Medicare andprovided that Executive shall be in compliance with the conditions set forth inSection 10, the Bank shall pay to Executive a lump sum amount equal on anafter-tax basis to the present value of the total cost of medical coverageunder the Health Plan that would have been incurred by both Executive and theBank on behalf of Executive (and his spouse and eligible dependents, if any,for whom coverage had been provided under the Health Plan immediately prior toExecutive’s termination of employment) from thedate of Executive’s termination of employment until the third anniversary ofsuch date, calculated on the assumption that the cost of such coverage wouldremain unchanged from that in effect for the year of Executive’s terminationof employment. Such lump sum 
16

 
   amount shall be calculated by an actuaryselected by the Bank and paid in cash at the time specified in Section 7(g).Such amount shall not be subject to reduction or forfeiture by reason ofany coverage for which Executive may thereafter become eligible by reason ofsubsequent employment or otherwise. In addition, provided that Executiveshall be in compliance with the conditions set forth in Section 10, the Bankshall pay to Executive at the time specified in Section 7(g) a lump sumamount equal on an after-tax basis to the present value of the sum of (A)the amount that Executive and the Bank would have paid, had he remainedemployed, for coverage under the Bank’s group long-term disability policyfrom the date of Executive’s termination of employment until the thirdanniversary of Executive’s termination of employment, calculated on theassumption that the cost of such coverage would remain unchanged from thatin effect for the year in which Executive’s termination occurred; and (B)the amount that Executive and the Bank would have paid to continueExecutive’s group life insurance coverage, had he remained employed, fromthe date of Executive’s termination of employment until the thirdanniversary of Executive’s termination of employment, calculated on theassumption that the cost of such coverage would remain unchanged from thatin effect for the year in which Executive’s termination occurred. Forpurposes of this Section, present value shall be calculated on the basis ofthe discount rate set forth in the Bank’s qualified retirement plan for thedetermination of lump sum payments.     (f) Termination by Executive for Good Reason Within Two Years After a Change inControl. Executive may terminate his employment hereunder for Good Reason, simultaneously withor within two years after a Change in Control, upon 90 days’ written notice to the Bank; provided,however, that, if the Bank has corrected the basis for such Good Reason within 30 days afterreceipt of such notice, Executive may not terminate his employment for Good Reason, and thereforeExecutive’s notice of termination will automatically become null and void. At the time Executive’semployment is terminated by Executive for Good Reason (i.e., at the expiration of such noticeperiod), the Term will terminate, all obligations of the Bank and Executive under Sections 1through 5 of this Agreement will immediately cease (except for obligations which continue aftertermination of employment as expressly provided herein), and the Bank will pay Executive at thetime specified in Section 7(g), and Executive will be entitled to receive, the following: (i) Executive’s Compensation Accrued at Termination;  (ii) Cash in an aggregate amount equal to three times the sum of (A)Executive’s Base Salary under Section 4(a) immediately prior to terminationplus (B) an amount equal to the greater of (x) the portion ofExecutive’s annual target incentive compensation potentially payable in cashto Executive (i.e., excluding the portion payable in stock or in othernon-cash awards) for the year of termination or (y) the portion ofExecutive’s annual incentive compensation that became payable in cash toExecutive (i.e., excluding the portion payable in stock or in other non-cash
17

 
   awards) for the latest year preceding the year of termination based onperformance actually achieved in that latest year. The amount determined tobe payable under this Section 7(f)(ii) shall be paid by the Bank in a lumpsum; (iii) In lieu of any annual incentive compensation under Section4(b) for the year in which Executive’s employment terminated, a lump sum amountequal to the portion of Executive’s annual target incentive compensationpotentially payable in cash to Executive (i.e., excluding the portion payablein stock or in other non-cash awards) for the year of termination, multipliedby a fraction the numerator of which is the number of days Executive wasemployed in the year of termination and the denominator of which is the totalnumber of days in the year of termination;  (iv) Stock options held by Executive at termination, if not thenvested and exercisable, will become fully vested and exercisable at the date ofsuch termination, and any such options granted on or after the Effective Dateshall remain outstanding and exercisable until the stated expiration date ofthe Option as though Executive’s employment did not terminate, and, in otherrespects, such options shall be governed by the plans and programs and theagreements and other documents pursuant to which such options were granted;  (v) Any performance objectives upon which the earning ofperformance-based restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards isconditioned shall be deemed to have been met at target level at the date oftermination, and restricted stock and deferred stock awards, includingoutstanding stock plan awards, and other long-term incentive awards (to theextent then or previously earned, in the case of performance-based awards)shall become fully vested and non-forfeitable at the date of such termination,and, in other respects, such awards shall be governed by the plans and programsand the agreements and other documents pursuant to which such awards weregranted;  (vi) All deferral arrangements under Section 5(d) will be settled inaccordance with the plans and programs governing the deferral;  (vii) All rights under the SERP shall be governed by such plan; and  (viii) Upon termination of Executive’s employment hereunder, if Executive is noteligible for retiree coverage under the Bank’s Health Plan or Medicareand provided that Executive shall be in compliance with the conditions setforth in Section 10, the Bank shall pay to Executive a lump sum amount equalon an after-tax basis to the present value of the total cost of medicalcoverage under the Health Plan that would have been incurred by bothExecutive and the Bank on behalf of Executive (and his spouse and eligibledependents, if any, for whom coverage had been provided under
18

 
   the Health Plan immediately prior to Executive’s termination ofemployment) from the date of Executive’s termination of employment until thethird anniversary of such date, calculated on the assumption that the costof such coverage would remain unchanged from that in effect for the year ofExecutive’s termination of employment. Such lump sum amount shall becalculated by an actuary selected by the Bank and paid in cash at the timespecified in Section 7(g). Such amount shall not be subject to reduction orforfeiture by reason of any coverage for which Executive may thereafterbecome eligible by reason of subsequent employment or otherwise. Inaddition, provided that Executive shall be in compliance with the conditionsset forth in Section 10, the Bank shall pay to Executive at the timespecified in Section 7(g) a lump sum amount equal on an after-tax basis tothe present value of the sum of (A) the amount that Executive and the Bankwould have paid, had he remained employed, for coverage under the Bank’sgroup long-term disability policy from the date of Executive’s terminationof employment until the third anniversary of Executive’s termination ofemployment, calculated on the assumption that the cost of such coveragewould remain unchanged from that in effect for the year in which Executive’stermination occurred; and (B) the amount that Executive and the Bank wouldhave paid to continue Executive’s group life insurance coverage, had heremained employed, from the date of Executive’s termination of employmentuntil the third anniversary of Executive’s termination of employment,calculated on the assumption that the cost of such coverage would remainunchanged from that in effect for the year in which Executive’s terminationoccurred. For purposes of this Section, present value shall be calculatedon the basis of the discount rate set forth in the Bank’s qualifiedretirement plan for the determination of lump sum payments.If any payment or benefit under this Section 7(f) is based on Base Salary or other level ofcompensation or benefits at the time of Executive’s termination and if a reduction in such BaseSalary or other level of compensation or benefit was the basis for Executive’s termination for GoodReason, then the Base Salary or other level of compensation in effect before such reduction shallbe used to calculate payments or benefits under this Section 7(f).     (g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section409A Exemptions; Delayed Payments Under Section 409A. (i) Whether the Executive has had a termination of employment shallbe determined on the basis of all relevant facts and circumstances and withreference to Regulations Section 1.409A-1(h).  (ii) Whether a termination is deemed to be at or within two yearsafter a Change in Control for purposes of Sections 7(c), (d), (e), or (f) isdetermined at the date of termination, regardless of whether the Change inControl had occurred at the time a notice of termination was given. In theevent Executive’s employment terminates for any reason set forth in
19

 
   Section7(b) through (f), Executive will be entitled to the benefit of any terms ofplans or agreements applicable to Executive which are more favorable thanthose specified in this Section 7 (except in the case of annual incentivesin lieu of which amounts are paid hereunder).  (iii) Amounts payable under this Section 7 following Executive’stermination of employment, other than those expressly payable on a deferredbasis, will be paid in the payroll period next following the payroll period inwhich termination of employment occurs except as otherwise provided in thisSection 7.  (iv) Any reimbursements made or in-kind benefits provided under thisAgreement shall be subject to the following conditions: (A) the amount of expenses eligible forreimbursement or in-kind benefits provided in any one taxable year ofExecutive shall not affect the amount of expenses eligible forreimbursement or in-kind benefits provided in any other taxable year ofExecutive;  (B) the reimbursement of any expense shall be madeeach calendar quarter not later than the last day of Executive’staxable year following Executive’s taxable year in which the expensewas incurred (unless this Agreement specifically provides forreimbursement by an earlier date);  (C) the right to reimbursement of an expense orpayment of an in-kind benefit shall not be subject to liquidation orexchange for another benefit.   In addition, with respect to any reimbursement made under Section 6(b)(v)for expenses for medical coverage purchased by Executive’s spouse, any suchreimbursement made during the period of time Executive’s spouse ordependents would be entitled to continuation coverage under the Bank’sHealth Plan pursuant to COBRA if Executive’s spouse or dependents hadelected such coverage and paid the applicable premiums shall be exempt fromSection 409A of the Code and the six-month delay in payment describedhereinbelow pursuant to Section 1.409A-1(b)(9)(v)(B) of the Regulations. (v) Executive’s right to reimbursements underthis Agreement shall be treated as a right to a series of separatepayments under Section 1.409A-2(b)(2)(iii) of the Regulations.  (vi) Any tax gross-up payments made under thisAgreement, within the meaning provided by Section 1.409A-3(i)(1)(v) oftheRegulations, shall be made by the end of Executive’s taxable yearnext following Executive’s taxable year in which he remits
20

 
   therelated taxes (unless this Agreement specifically provides forpayment by an earlier date).  (vii) It is intended that payments made under thisAgreement due to Executive’s termination of employment which are paidon or before the 15th day of the third month following the end ofExecutive’s taxable year in which his termination of employment occursshall be exempt from compliance with Section 409A of the Code pursuantto the exemption for short-term deferrals set forth in Section1.409A-1(b)(4) of the Regulations (the “Exempt Short-Term DeferralPayments”); and that payments under this Agreement, other than ExemptShort-Term Deferral Payments, that are made on or before the last dayof the second taxable year following the taxable year in whichExecutive terminates employment in an aggregate amount not exceedingtwo times the lesser of: (A) the sum of Executive’s annualizedcompensation based on his annual rate of pay for the taxable yearpreceding the taxable year in which he terminates employment (adjustedfor any increase during that year that was expected to continueindefinitely if he had not terminated employment); or (B) the maximumamount that may be taken into account under a qualified plan pursuantto Section 401(a)(17) of the Code for the year in which Executiveterminates employment shall be exempt from compliance with Section409A of the Code pursuant to the exception for payments under aseparation pay plan as set forth in Section 1.409A-1(b)(9)(iii) of theTreasury Regulations. If, under the terms of this Agreement, it ispossible for a payment that is subject to Section 409A to be made intwo separate taxable years, payment shall be made in the later taxableyear.  (viii) Anything in this Agreement to the contrary notwithstanding, paymentsto be made under this Agreement upon termination of Executive’semployment which are subject to Section 409A of the Code shall bedelayed for six months following such termination of employment ifExecutive is a Specified Employee as defined in Section 8(g) on thedate of his termination of employment. Any payment or reimbursementdue within such six-month period shall be delayed to the end of suchsix-month period. The Bank will adjust the payment or reimbursement toreflect the deferred payment date by multiplying the payment orreimbursement by the product of the six-month CMT Treasury Billannualized yield rate as published by the U.S. Treasury for the dateon which such payment or reimbursement would have been made but forthe delay multiplied by a fraction, the numerator of which is thenumber of days by which suchpayment or reimbursement was delayed and the denominator of whichis 365. In the event of a reimbursement that is required by
21

 
 ** ** otherterms of this Agreement to be made on an after-tax basis and whichis subject to the six-month delay provided herein, thereimbursement as adjusted in accordance with this Section 7(g) toreflect the deferred payment date shall be paid to Executive on anafter-tax and fully grossed-up basis so that Executive is heldeconomically harmless. The Bank will pay the adjusted payment orreimbursement at the beginning of the seventh month followingExecutive’s termination of employment. Notwithstanding theforegoing, if calculation of the amounts payable by any paymentdate specified in this Section 7(g) is not administrativelypracticable due to events beyond the control of Executive (orExecutive’s beneficiary or estate) and for reasons that arecommercially reasonable, payment will be made as soon asadministratively practicable in compliance with Section 409A of theCode and the Regulations thereunder. In the event of Executive’sdeath during such six-month period, payment will be made in thepayroll period next following the payroll period in whichExecutive’s death occurs.8. **Definitions Relating to Termination Events.**     (a) “Cause.” For purposes of this Agreement, “Cause” shall mean: (i) Executive’s willful and continued failure to substantiallyperform his duties hereunder (other than any such failure resulting fromincapacity due to physical or mental illness or Disability or any failure afterthe issuance of a notice of termination by Executive for Good Reason) whichfailure is demonstrably and materially damaging to the financial condition orreputation of the Company, the Bank and/or their affiliates, and which failurecontinues more than 48 hours after a written demand for substantial performanceis delivered to Executive by the Board, which demand specifically identifiesthe manner in which the Board believes that Executive has not substantiallyperformed his duties hereunder and the demonstrable and material damage causedthereby; or  (ii) the willful engaging by Executive in conduct which isdemonstrably and materially injurious to the Company, the Bank or theiraffiliates, monetarily or otherwise.No act, or failure to act, on the part of Executive shall be deemed “willful” unless done, oromitted to be done, by Executive not in good faith and without reasonable belief that his action oromission was in the best interest of the Bank and the Company. Notwithstanding the foregoing,Executive shall not be deemed to have been terminated for Cause unless and untilthere shall have been delivered to Executive a copy of the resolution duly adopted by theaffirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at ameeting of the Board (after reasonable notice to Executive and an opportunity for Executive,together with Executive’s counsel, to be heard before the Board) finding that, in the good faith
22

 
opinion of the Board, Executive was guilty of conduct set forth above in this definition andspecifying the particulars thereof in detail.     (b) “Change in Control.” For purposes of this Agreement, a “Change in Control” shallbe deemed to have occurred if, during the term of this Agreement: (i) the Company, or the mutual holding company parent of theCompany, whether it remains a mutual holding company or converts to the stockform of organization (the “Mutual Holding Company”), merges into orconsolidates with another corporation, or merges another corporation into theCompany or the Mutual Holding Company, and as a result, with respect to theCompany, less than a majority of the combined voting power of the resultingcorporation immediately after the merger or consolidation is held by “Persons”as such term is used for purposes of Section 13(d) or 14(d) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”) who were stockholders ofthe Company immediately before the merger or consolidation or, with respect tothe Mutual Holding Company, less than a majority of the directors of theresulting corporation immediately after the merger or consolidation weredirectors of the Mutual Holding Company immediately before the merger orconsolidation;  (ii) following a conversion of the Mutual Holding Company to thestock form of organization, any Person (other than any trustee or otherfiduciary holding securities under an employee benefit plan of the Bank or theCompany), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under theExchange Act), directly or indirectly, of securities of the resultingcorporation representing 50% or more of the combined voting power of theresulting corporation’s then-outstanding securities;  (iii) during any period of twenty-four months (not including anyperiod prior to the Effective Date of this Agreement), individuals who at thebeginning of such period constitute the board of directors of the Company, andany new director (other than (A) a director nominated by a Person who hasentered into an agreement with the Company to effect a transaction describedin Sections (8)(b)(i), (ii) or (iv) hereof, (B) a director nominated by anyPerson (including the Company) who publicly announces an intention to take orto consider taking actions (including, but not limited to, an actual orthreatened proxy contest) which if consummated would constitute a Change inControl or (C) a director nominated by any Person who is the Beneficial Owner,directly or indirectly, of securities of the Company representing 50% or moreof the combined voting power of the Company’s securities) whose election by theboard of directors of theCompany or nomination for election by the Company’s stockholders wasapproved in advance by a vote of at least two-thirds (2/3) of the directorsthen still in office who either were directors at the beginning of theperiod
23

 
 ** ** or whose election or nomination for election was previously soapproved, cease for any reason to constitute at least a majority thereof;  (iv) the stockholders of the Company approve a plan of completeliquidation of the Company or an agreement for the sale or disposition by theCompany of all or substantially all of the Company’s assets; or  (v) the board of directors of the Company adopts a resolution tothe effect that, for purposes of this Agreement, a Change in Control hasoccurred.     (c) “Compensation Accrued at Termination.” For purposes of this Agreement,“Compensation Accrued at Termination” means the following: (i) The unpaid portion of annual base salary at the rate payable,in accordance with Section 4(a) hereof, at the date of Executive’s terminationof employment, pro rated through such date of termination, payable in a lumpsum at the time specified in Section 6(d) or 7(g) as the case may be;  (ii) All vested, nonforfeitable amounts owing or accrued at the dateof Executive’s termination of employment under any compensation and benefitplans, programs, and arrangements set forth or referred to in Sections 4(b) and5(a) and 5(b) hereof (including any earned and vested annual incentivecompensation and long-term incentive award) in which Executive theretoforeparticipated, payable in accordance with the terms and conditions of the plans,programs, and arrangements (and agreements and documents thereunder) pursuantto which such compensation and benefits were granted or accrued; and  (iii) Reasonable business expenses and disbursements incurred byExecutive prior to Executive’s termination of employment, to be reimbursed toExecutive, as authorized under Section 5(f), in accordance the Company’sreimbursement policies as in effect at the date of such termination, andpayable in a lump sum in accordance with Section 7(g).     (d) “Disability.” For purposes of this Agreement, “Disability” shall have the meaningascribed to it by Section 409A of the Code and the Regulations.     (e) “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean, withoutExecutive’s express written consent, the occurrence of any of the following circumstances providedthat Executive shall have given notice of such circumstance(s) to the Bank within a period not toexceed 90 days of the initial existenceof such circumstance(s) and the Bank shall not have remedied such circumstance(s) within 30days after receipt of such notice: (i) the assignment to Executive of duties materially inconsistentwith Executive’s position and status as Senior Vice President, or analteration, materially adverse to Executive, in Executive’s position and statusas Senior Vice President or in the nature of Executive’s duties,
24

 
   responsibilities, and authorities or conditions of Executive’s employment fromthose relating to Executive position and status as Senior Vice President(excluding changes in assignments permitted under Section 3); except theforegoing shall not constitute Good Reason if occurring in connection with thetermination of Executive’s employment for Cause, Disability, Retirement, as aresult of Executive’s death, or as a result of action by or with the consent ofExecutive;  (ii) (A) a material reduction by the Bank in Executive’s BaseSalary, (B) the setting of Executive’s annual target incentive opportunity orpayment of earned annual incentive not in material conformity with Section 4hereof, (C) a change in compensation or benefits not in material conformitywith Section 5, or (D) a material reduction, after a Change in Control, inperquisites from the level of such perquisites as in effect immediately priorto the Change in Control or as the same may have been increased from time totime after the Change in Control, except for across-the-board perquisitereductions similarly affecting all senior executives of the Bank and all seniorexecutives of any Person in control of the Company;  (iii) the relocation of the principal place of Executive’semployment to a site that is outside of a fifty mile radius of his principalplace of employment prior to such relocation; for this purpose, required travelon the Bank’s business will not constitute a relocation so long as the extentof such travel is substantially consistent with Executive’s customary businesstravel obligations in periods prior to the Effective Date;  (iv) the failure by the Bank to pay to Executive any materialportion of Executive’s compensation or to pay to Executive any material portionof an installment of deferred compensation under any deferred compensationprogram of the Bank within a reasonable time after the date such compensationis due;  (v) the failure by the Bank to continue in effect any materialcompensation or benefit plan in which Executive participated immediately priorto a Change in Control, unless an equitable arrangement (embodied in an ongoingsubstitute or alternative plan) has been made with respect to such plan, or thefailure by the Bank to continue Executive’s participation therein (or in suchsubstitute or alternative plan) on a basis not materially less favorable, bothin terms of the amounts of compensation or benefitsprovided and the level of Executive’s participation relative to otherparticipants, as existed at the time of the Change in Control;  (vi) the failure of the Bank to obtain a satisfactory agreement fromany successor to the Bank, the Company or the Mutual Holding Company to fullyassume the Bank’s and the Company’s obligations and to perform under thisAgreement, as contemplated in Section 12(b) hereof, in a form reasonablyacceptable to Executive; or
25

 
 (vii) any other failure by the Bank or the Company to perform anymaterial obligation under, or breach by the Bank or the Company of any materialprovision of, this Agreement;provided, however, that a forfeiture under Section 10(f), (g), or (h) shall not constitute “GoodReason.”     (f) “Potential Change in Control.” For purposes of this Agreement, a “PotentialChange in Control” shall be deemed to have occurred if, during the term of this Agreement: (i) the Company enters into an agreement, the consummation of which would result inthe occurrence of a Change in Control;  (ii) any Person (including the Company) publicly announces an intention to take orto consider taking actions which if consummated would constitute a Change in Control;or  (iii) the Board adopts a resolution to the effect that, for purposes of thisAgreement, a Potential Change in Control has occurred.     (g) “Specified Employee.” For purposes of this Agreement, a “Specified Employee”shall mean an employee of the Bank, at a time when any stock of the Company is publicly traded onan established securities market or otherwise, who satisfies the requirements for being designateda “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section416(i)(5) of the Code at any time during a calendar year, in which case such employee shall beconsidered a Specified Employee for the twelve-month period beginning on the first day of thefourth month immediately following the end of such calendar year. In the event of any corporatespinoff or merger, the determination of which employees meet the requirements of Section416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for anycalendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).9. **Limitation on Change in Control Payments.**     In the event that:     (a) the aggregate payments or benefits to be made to you pursuant to this Agreement, togetherwith other payments and benefits which you have a right to receive from the Bank, which are deemedto be parachute payments as defined in Section 280G of the Code (the “Termination Benefits”), wouldbe deemed to include an “excess parachute payment” under Section 280G of the Code; and     (b) if such Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), thevalue of which is one dollar ($1.00) less than an amount equal to three times your “base amount,”as determined in accordance with said Section 280G, and the Non-Triggering Amount less the productof the marginal rate of any applicable state and federal income tax and the Non-Triggering Amountwould be greater than the aggregate value of the Termination Benefits (without such reduction)minus (A) the amount of tax required to be paid by you by
26

 
     Section 4999 of the Code and furtherminus (B) the product of the Termination Benefits and the marginal rate of any applicable state andfederal income tax,then the Termination Benefits shall be reduced to the Non-Triggering Amount. The reductionrequired hereby among the Termination Benefits shall be allocated to the payments and benefits setforth in Sections 7(c), 7(d), 7(e), and 7(f), as applicable, in the following order until thereduction is fully accomplished: Subsection (ii), (iii) and (viii) of Sections 7(c), 7(d), 7(e),and 7(f), as applicable. If, however, the reduction cannot be fully accomplished after using theorder in the prior sentence, the reduction shall be allocated to any other remaining payments orbenefits at the Bank’s discretion.10. **Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; CertainForfeitures.**     (a) Non-Competition. In consideration for the compensation and benefits providedunder this Agreement, including without limitation, the compensation and benefits provided underSections 7(e) and (f), without the consent in writing of the Board, Executive will not, at any timeduring the Term and for a period of two years following termination of Executive’s employment forany reason, acting alone or in conjunction with others, directly or indirectly (i) engage (eitheras owner, investor, partner, stockholder, employer, employee, consultant, advisor, or director) inany business of any savings bank, savings and loan association, savings and loan holding company,bank, bank holding company, or other institution engaged in the business of accepting deposits ormaking loans, or any direct or indirect subsidiary or affiliate of any such entity, that conductsbusiness in any county in which the Company or the Bank maintains an office as of Executive’s dateof termination or had plans to open an office within six months after Executive’s date oftermination; (ii) induce any customers of the Bank or any of its affiliates with whom Executive hashad contacts or relationships, directly or indirectly, during and within the scope of hisemployment with the Bank, to curtail or cancel their business with the Bank or any such affiliate;(iii) induce, or attempt to influence, any employee of the Bank or any of its affiliates toterminate employment; or (iv) solicit, hire or retain as an employee or independent contractor, orassist any third party in the solicitation, hire, or retention as an employee or independentcontractor, any person who during the previous twelve months was an employee of the Bank or anyaffiliate; provided, however, that the limitation contained in clause (i) above shall not apply ifExecutive’s employment is terminated as a result of a termination by the Company without Cause within twoyears following a Change in Control or is terminated by Executive for Good Reason within two yearsfollowing a Change in Control or is terminated by Executive other than for Good Reason as providedin Section 7(b) and, provided further, that activities engaged in by or on behalf of the Bank arenot restricted by this covenant. The provisions of subparagraphs (i), (ii), (iii), and (iv) aboveare separate and distinct commitments independent of each of the other subparagraphs. It is agreedthat the ownership of not more than one percent of the equity securities of any company havingsecurities listed on an exchange or regularly traded in the over-the-counter market shall not, ofitself, be deemed inconsistent with clause (i) of this Section 10(a).     (b) Non-Disclosure; Ownership of Work. Executive shall not, at any time during theTerm and thereafter (including following Executive’s termination of employment for any reason),disclose, use, transfer, or sell, except in the course of employment with or other service
27

 
to theBank or the Company, any proprietary information, secrets, organizational or employee information,or other confidential information belonging or relating to the Bank or the Company and itsaffiliates and customers so long as such information has not otherwise been disclosed or is nototherwise in the public domain, except as required by law or pursuant to legal process. Inaddition, upon termination of employment for any reason, Executive will return to the Company orits affiliates all documents and other media containing information belonging or relating to theBank and the Company or its affiliates.     (c) Cooperation With Regard to Litigation. Executive agrees to cooperate with theBank and the Company, during the Term and thereafter (including following Executive’s terminationof employment for any reason), by making himself available to testify on behalf of the Bank or theCompany or any subsidiary or affiliate of the Bank or the Company, in any action, suit, orproceeding, whether civil, criminal, administrative, or investigative, and to assist the Bank andthe Company, or any subsidiary or affiliate of the Company, in any such action, suit, orproceeding, by providing information and meeting and consulting with the Board or itsrepresentatives or counsel, or representatives or counsel to the Bank or the Company, or anysubsidiary or affiliate of the Company, as requested. The Bank agrees to reimburse Executive, onan after tax basis each calendar quarter, for all expenses actually incurred in connection with hisprovision of testimony or assistance in accordance with the provisions of Section 7(g) of thisAgreement but not later than the last day of the year in which the expense was incurred.     (d) Non-Disparagement. Executive shall not, at any time during the Term andthereafter, make statements or representations, or otherwise communicate, directly or indirectly,in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparagethe Bank or the Company or any of its subsidiaries or affiliates or their respective officers,directors, employees, advisors, businesses or reputations. Notwithstanding the foregoing, nothingin this Agreement shall preclude Executive from making truthful statements that are required byapplicable law, regulation or legal process.     (e) Release of Employment Claims. Executive agrees, as a condition to receipt of anytermination payments and benefits provided for in Sections 6 and 7 herein (other than CompensationAccrued at Termination), thathe will execute a general release agreement, in substantially the form set forth in AttachmentA to this Agreement, releasing any and all claims arising out of Executive’s employment other thanenforcement of this Agreement and rights to indemnification under any agreement, law, Bank orCompany organizational document or policy, or otherwise. The Bank will provide Executive with acopy of such release simultaneously with or as soon as administratively practicable following thedelivery of the notice of termination provided in Sections 6 and 7 of this Agreement, but not laterthan 21 days before (45 days before if Executive’s termination is part of an exit incentive orother employment termination program offered to a group or class of employees) Executive’stermination of employment. Executive shall deliver the executed release to the Bank eight daysbefore the date provided in Section 7(g) of this Agreement for the payment of the terminationpayments and benefits payable under Sections 6 and 7 of this Agreement.     (f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7notwithstanding, if Executive willfully and materially fails to substantially comply with anyrestrictive covenant under this Section 10 or willfully and materially fails to substantiallycomply
28

 
with any material obligation under this Agreement, all options to purchase common stockgranted by the Company and then held by Executive or a transferee of Executive shall be immediatelyforfeited and thereupon such options shall be cancelled. Notwithstanding the foregoing, Executiveshall not forfeit any option unless and until there shall have been delivered to him, within sixmonths after the Board (i) had knowledge of conduct or an event allegedly constituting grounds forsuch forfeiture and (ii) had reason to believe that such conduct or event could be grounds for suchforfeiture, a copy of a resolution duly adopted by a majority affirmative vote of the membership ofthe Board (excluding Executive) at a meeting of the Board called and held for such purpose (aftergiving Executive reasonable notice specifying the nature of the grounds for such forfeiture and notless than 30 days to correct the acts or omissions complained of, if correctable, and affordingExecutive the opportunity, together with his counsel, to be heard before the Board) finding that,in the good faith opinion of the Board, Executive has engaged and continues to engage in conductset forth in this Section 10(f) which constitutes grounds for forfeiture of Executive’s options;provided, however, that if any option is exercised after delivery of such notice and the Boardsubsequently makes the determination described in this sentence, Executive shall be required to payto the Company an amount equal to the difference between the aggregate value of the shares acquiredupon such exercise at the date of the Board determination and the aggregate exercise price paid byExecutive. Any such forfeiture shall apply to such options notwithstanding any term or provisionof any option agreement. In addition, options granted to Executive on or after the Effective Date,and gains resulting from the exercise of such options, shall be subject to forfeiture in accordancewith the Company’s standard policies relating to such forfeitures and clawbacks, as such policiesare in effect at the time of grant of such options.     (g) Forfeiture of Certain Bonuses and Profits. If the Company is required to preparean accounting restatement due to the material noncompliance of the Company, as a result ofmisconduct, with any financial reporting requirement under the securities laws, Executive shallreimburse the Bank for (i) any bonus or other incentive based or equity-based compensation receivedby Executive during the 12-month period following the first public issuance or filing with theSecurities and Exchange Commission (whichever first occurs) of the financial document embodyingsuch financial reportingrequirement; and (ii) any profits realized from the sale of securities of the Company duringthat 12-month period.     (h) Forfeiture Due to Regulatory Restrictions. Anything in this Agreement or the SERPto the contrary notwithstanding, (i) any payments made pursuant to this Agreement or the SERP shallbe subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and any regulationspromulgated thereunder; and (ii) payments contemplated to be made by the Bank pursuant to thisAgreement or the SERP shall not be immediately payable to the extent such payments are barred orprohibited by an action or order issued by the Connecticut Banking Commissioner or the FederalDeposit Insurance Corporation.     (i) Survival. The provisions of this Section 10 shall survive the termination of theTerm and any termination or expiration of this Agreement.11. **Governing Law; Disputes.**     (a) Governing Law. This Agreement and the rights and obligations of the Company, theBank and Executive are governed by and are to be construed, administered, and enforced in
29

 
accordance with the laws of the State of Connecticut, without regard to conflicts of lawprinciples. If under the governing law, any portion of this Agreement is at any time deemed to bein conflict with any applicable statute, rule, regulation, ordinance, or other principle of law,such portion shall be deemed to be modified or altered to the extent necessary to conform theretoor, if that is not possible, to be omitted therefrom. The invalidity of any such portion shall notaffect the force, effect, and validity of the remaining portion thereof. If any court determinesthat any provision of Section 10 of this Agreement is unenforceable because of the duration orgeographic scope of such provision, it is the parties’ intent that such court shall have the powerto modify the duration or geographic scope of such provision, as the case may be, to the extentnecessary to render the provision enforceable and, in its modified form, such provision shall beenforced. Anything in this Agreement to the contrary notwithstanding, the terms of this Agreementshall be interpreted and applied in a manner consistent with the requirements of Section 409A ofthe Code and the Regulations so as not to subject Executive to the payment of any tax penalty orinterest which may be imposed by Section 409A of the Code and the Bank shall have no right toaccelerate or make any payment under this Agreement except to the extent such action would notsubject Executive to the payment of any tax penalty or interest under Section 409A of the Code. Ifall or a portion of the benefits and payments provided under this Agreement constitute taxableincome to Executive for any taxable year that is prior to the taxable year in which such paymentsand/or benefits are to be paid to Executive as a result of the Agreement’s failure to comply withthe requirements of Section 409A of the Code and the Regulations, the applicable payment or benefitshall be paid immediately to Executive to the extent such payment or benefit is required to beincluded in income. If Executive becomes subject to any tax penalty or interest under Section 409Aof the Code by reason of this Agreement, the Bank shall reimburse Executive on a fully grossed-upand after-tax basis for any such tax penalty or interest (so that Executive is held economicallyharmless) ten business days prior to the date such tax penalty or interest is due and payable byExecutive to the government.     (b) Reimbursement of Expenses in Enforcing Rights. Upon submission of invoices, theBank shall promptly pay or reimburse all reasonable costs and expenses (including fees anddisbursements of counsel and pension experts) incurred by Executive or Executive’s surviving spousein seeking to interpret this Agreement or enforce rights pursuant to this Agreement or in anyproceeding in connection therewith brought by Executive or Executive’s surviving spouse, whether ornot Executive or Executive’s surviving spouse is ultimately successful in enforcing such rights orin such proceeding; provided, however, that no reimbursement shall be owed with respect to expensesrelating to any unsuccessful assertion of rights or proceeding if and to the extent that suchassertion or proceeding was initiated or maintained in bad faith or was frivolous, as determinedin accordance with Section 11(c) or a court having jurisdiction over the matter. Any such paymentor reimbursement shall be made on an after-tax basis each calendar quarter for all costs andexpenses actually incurred as provided in this Section 11(b) and in accordance with the provisionsof Section 7(g) of this Agreement, but not later than the last day of the year in which the expensewas incurred.     (c) Dispute Resolution.
30

 
 (i) Negotiation. The Bank and the Company (collectively,the “Employer”) and Executive shall attempt in good faith to resolve anydispute arising out of or relating to this Agreement promptly by negotiationbetween the Chief Executive Officer of the Bank and Executive. Any party maygive the other party written notice of any dispute in accordance with thenotice procedures set forth in Section 12(d). Within 15 days after delivery ofthe notice, the receiving party shall submit to the other, in accordance withthe notice procedures set forth in Section 12(d), a written response. Thenotice and response shall include a statement of that party’s position andsummary of arguments supporting that position. Within 30 days after deliveryof the initial notice, the parties shall meet at a mutually acceptable time andplace, and thereafter as often as they reasonably deem necessary, to attempt toresolve the dispute. All negotiations pursuant to this clause (i) areconfidential and shall be treated as compromise and settlement negotiations forpurposes of applicable rules of evidence.  (ii) Mediation. If the dispute has not been resolved bynegotiation as provided herein within 45 days after delivery of the initialnotice of negotiation, or if the parties failed to meet within 30 days afterdelivery, the parties shall endeavor to settle the dispute by mediation underthe CPR Mediation Procedure then currently in effect; provided, however, thatif one party fails to participate in the negotiation as provided herein, theother party can initiate mediation prior to the expiration of the 45 days.Unless otherwise agreed, the parties will select a mediator from the CPR Panelsof Distinguished Neutrals.  (iii) Arbitration. Any dispute arising under or inconnection with this Agreement which has not been resolved by mediation asprovided herein within 45 days after initiation of the mediation procedure,shall be finally resolved by arbitration in accordance with the CPR Rules forNon-Administered Arbitration then currently in effect, by three independent andimpartial arbitrators, of whom each party shall designate one; provided,however, that if one party fails to participate in either the negotiation ormediation as agreed herein, the other party can commence arbitration prior tothe expiration of the time periods set forth above. The arbitration shall begoverned by the Federal Arbitration Act, 9 U.S.C. §§1-16, and judgment upon theaward rendered by the arbitrators may be entered by any court havingjurisdiction thereof. The place of arbitration shall be Hartford, Connecticut.For purposes of entering any judgment upon an award rendered by thearbitrators, the Company, the Bank and Executive hereby consent to thejurisdiction of any or all of the following courts: (i) the United StatesDistrict Court for the District of Connecticut, (ii) any of the courts of theState of Connecticut, or (iii) any other court having jurisdiction. TheCompany, the Bank and Executive hereby agree that a judgment upon an awardrendered by the arbitrators may be enforced in other jurisdictions by suit onthe judgment or in any other manner provided by law. Subject to Section 11(b)of this Agreement, the
31

 
   Bank shall bear all costs and expenses arising inconnection with any arbitration proceeding pursuant to this Section 11(c) inaccordance with the provisions of Section 7(g) of this Agreement, but not laterthan the last day of the year in which the expense was incurred.Notwithstanding any provision in this Section 11(c), Executive shall beentitled to seek specific performance of Executive’s right to be paid duringthe pendency of any dispute or controversy arising under or in connection withthis Agreement.     (d) Interest on Unpaid Amounts. Any amount which has become payable pursuant to theterms of this Agreement or any decision by arbitrators or judgment by a court of law pursuant tothis Section 11 but which has not been timely paid shall bear interest at the prime rate in effectat the time such amount first becomes payable, as quoted by the Bank, except as otherwise providedin Sections 5(g), 6(d) and 7(g) of this Agreement (concerning interest payable with respect tocertain delayed payments that are subject to Section 409A of the Code).12. **Miscellaneous.**     (a) Integration. This Agreement cancels and supersedes any and all prior employmentagreements and understandings between the parties hereto with respect to the employment ofExecutive by the Bank, any parent or predecessor company, and the Company’s subsidiaries during theTerm, except for contracts relating to compensation under executive compensation and employeebenefit plans of the Bank. This Agreement constitutes the entire agreement among the parties withrespect to the matters herein provided, and no modification or waiver of any provision hereof shallbe effective unless in writing and signed by the parties hereto. Executive shall not be entitledto any payment orbenefit under this Agreement which duplicates a payment or benefit received or receivable byExecutive under any prior agreements and understandings or under any benefit or compensation planof the Bank which are in effect.     (b) Successors; Transferability. The Bank and the Company shall require any successor(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all orsubstantially all of the business and/or assets of the Bank or the Company to expressly assume andagree to perform this Agreement in the same manner and to the same extent that the Bank and theCompany would be required to perform it if no such succession had taken place.     As used in this Agreement, “Bank “and “Company” shall mean the Bank and the Companyrespectively as hereinbefore defined and any successor to its or their business and/or assets asaforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise and,in the case of an acquisition of the Bank or the Company in which the corporate existence of theBank or the Company, as the case may be, continues, the ultimate parent company following suchacquisition. Subject to the foregoing, the Bank and the Company may transfer and assign thisAgreement and the Bank’s and the Company’s rights and obligations hereunder. Neither thisAgreement nor the rights or obligations hereunder of the parties hereto shall be transferable orassignable by Executive, except in accordance with the laws of descent and distribution or asspecified in Section 12(c).     (c) Beneficiaries. Executive shall be entitled to designate (and change, to theextent permitted under applicable law) a beneficiary or beneficiaries to receive any compensationor benefits provided hereunder following Executive’s death.
32

 
     (d) Notices. Whenever under this Agreement it becomes necessary to give notice, suchnotice shall be in writing, signed by the party or parties giving or making the same, and shall beserved on the person or persons for whom it is intended or who should be advised or notified, byFederal Express or other similar overnight service or by certified or registered mail, returnreceipt requested, postage prepaid and addressed to such party at the address set forth below or atsuch other address as may be designated by such party by like notice:   If to the Bank or the Company:    ROCKVILLE BANK